- Kalshi has been ordered to cease and desist operations in Massachusetts.
- Massachusetts Attorney General Andrea Joy Campbell filed the lawsuit against Kalshi on Friday.
BOSTON – Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit on Friday against Kalshi for operating their online prediction market product in the state without a license.
Massachusetts Gaming Commission Chair Jordan Maynard praised the lawsuit. A few points that Maynard outlined:
- Kalshi’s disregard for the legal sports betting age that the Massachusetts Gaming Commission has established. The MGC has set the minimum age at 21 years old, but Kalshi accepts all players who are at least 18.
- Kalshi does not provide the standard protections for problem gamblers. Those protections often include deposit limits and educational tools that teach the risks of betting to gamblers.
- Kalshi does not pay the same tax rate as other legal sports betting sites in Massachusetts, which is 20% of gross sports wagering revenue.
The press release by the Massachusetts Attorney General and the MA Gaming Commission was not a surprise, as other regulatory authorities in other states have also gone after Kalshi.
Massachusetts was the eighth state to issue a cease-and-desist order to Kalshi. The first seven were:
- Arizona
- Illinois
- Maryland
- Montana
- Nevada
- New Jersey
- Ohio
The arguments that each state makes for why Kalshi should be banned are all relatively similar to those made by MA AG Andrea Joy Campbell.
The low minimum age, lack of local licensing, and few consumer protections are all key points, but the real issue on the minds of legislators is likely the lost tax money.
Legal sports betting sites that are regulated by the state often pay extremely high tax rates on net gambling income. That’s especially true in the northeast, with states like New York (51%), New Hampshire (31%-33%), Maine (51%), and Rhode Island (51%).
Given their high tax rates and proximity to Massachusetts, those states may be the next to file cease-and-desist orders against Kalshi.
